The offsite advantage in retail media
While marketers and retailers recognise retail media’s power, starting the journey is where things can come unstuck. But as Nick Hinsley, chief revenue officer at retail media platform Zitcha, writes, offsite retail media will become an increasingly powerful driver in its exponential expansion.
With the global retail media market predicted to surpass TV ad spending within five years, hitting US$176 billion annually, it is unsurprising retailers and brand advertisers are racing to capitalise on this burgeoning media sector.
While marketers and retailers recognise retail media’s power, starting the journey is where things can come unstuck. Already stressed marketers, under pressure to drive sales revenues from the CEO and CFO, have yet another media consideration to add to their already large to-do list.
Off-site retail media channels, such as Meta’s Instagram, Facebook and YouTube as well as Google are the most compelling and easier option for retailers and brand advertisers to kickstart their retail media journeys. These channels have lower barriers to entry making it an attractive starting point in building and optimising retail media networks.
In part we have Meta and Google to thank. Both tech giants have spent huge sums in educating marketers on how to leverage and segment their vast audiences to drive acquisition and sales, which in turn has resulted in widespread acceptance and adoption of this prized digital marketing channel.
From the retailers’ perspective, this means onboarding brand advertisers to activate across their off-site retail media channels is much simpler. It can be managed by their marketing teams, without the need to involve merchandising or tech teams, and it’s something brand partners are typically already doing, so the barriers to entry are much lower.
Traditional above the line media channels frequently face challenges when it comes to delivering precise ROI metrics. However, with the shift towards a cookie-less future, retail media networks step in to bridge the gap, bringing brands closer to the point of purchase for consumers.
But changes by Apple in 2021 with the launch of iOS14 also hit marketers hard. Signals that once provided a clearer view on what conversion or return on advertising spend disappeared almost completely. It became harder for marketers to have visibility on campaign performance.
Which is why offsite retail media is so powerful. It brings consumers closer to the point of purchase, closing the campaign attribution loop and offering reliable data on the return of advertising spend. Put simply, retailers leveraging their first party data offer brand advertisers valuable data and intent signals, enabling them to gain a better understanding of their return on their marketing investment. This clarity drives greater confidence and trust in off-site advertising strategies and performance.
Off-site channels enable retailers to monetise their first party data more effectively. Collaborating with brand advertisers means retailers can attract new revenue from those brands that might not have otherwise considered spending with them.
There are other obvious benefits too. Typically retailers can earn 30% by opening their offsite media channels to brand advertisers. That’s money coming directly off the operating bottom line. Once other retail media channels are added in such as onsite, which boasts margins of up to 90% and in-store, the retailer’s marketing function switches from being a cost centre to one of profit. Which CEO or CFO is going to say no to that?
Offsite retail media’s strategic advantage lies in its ability to blend seamlessly with existing marketing strategies, drive additional revenue, and offer clearer insights into advertising performance. The simplicity of onboarding and execution makes it a natural starting point for retailers that want to embark on their retail media journey, but are not sure the best way to begin. As retailers and brands continue to explore this channel’s potential, offsite retail media will become an increasingly powerful driver in retail media’s exponential expansion.
Nick Hinsley is chief revenue officer at retail media platform Zitcha
